The President-elect of the United States, Donald Trump, is set to inherit the world's leading economy. Americans have given him an "unprecedented and powerful mandate" through the election. On the campaign trail, Trump offered many ideas for the future, including plans to have other countries "pay us back for all that we've done for the world" and to "drill, baby, drill."
Discretion and Influence
In reality, President Trump will have quite a great deal of discretion on how he acts, especially with a Republican Congress. However, this is not just a "magic wish list of everything that Trump wants." The incoming administration will have to navigate a complex economic landscape.
Many Americans voted with their wallets in this election, as consumer prices have increased over 20% since February 2020. This is an issue that the Federal Reserve typically manages, but President Trump may seek more control there. He has expressed a belief that he has a "better instinct" than the Federal Reserve. However, politicizing the central bank is generally associated with higher rates of inflation, which could ultimately hurt the US and benefit the rest of the world.
Trump has proposed ideas like leaving about 93 million Americans off the hook for at least a portion of their federal income taxes. While this may seem bold, such proposals often transform by the time they are implemented. The tax cuts passed during Trump's first term are set to expire in 2025, and Republicans generally want to see those extended. To pay for such cuts, Congress may consider ending the tax-exempt status for municipal bonds or dialing back healthcare spending, which could add to the national debt.
Another option to boost economic growth is to loosen regulations that impact industries like oil production, airlines, banking, and tech. The deregulatory process is seen as a potential area of influence for the Trump administration. However, the extent to which Trump alone can shape the economy is often overstated, as it is subject to many foreign influences.
Trump has also called for tariffs of 10 to 20% on imports, with higher tariffs on Chinese goods. The goal is to generate revenue and bring industrial jobs back to the US. However, this could lead to higher prices for consumers, particularly impacting lower-income households, and make it harder to produce industrial products in the US.
The President-elect's promise to deport undocumented people could also have a far-reaching economic impact. If a substantial number of the estimated 8.3 million undocumented workers in the US were expelled, it would have large negative effects on the economy, particularly in sectors like agriculture and construction. Food prices would rise, and the housing market would be substantially disrupted, as these workers provide a reservoir of relatively low-cost labor that is essential to the functioning of the economy.
In conclusion, the economic outlook under President Trump is complex and multifaceted. While he has proposed bold ideas, the actual implementation and impact remain to be seen as he navigates the realities of governing the world's leading economy.
Part 1/5:
The Economic Outlook Under President Trump
Inheriting the World's Leading Economy
The President-elect of the United States, Donald Trump, is set to inherit the world's leading economy. Americans have given him an "unprecedented and powerful mandate" through the election. On the campaign trail, Trump offered many ideas for the future, including plans to have other countries "pay us back for all that we've done for the world" and to "drill, baby, drill."
Discretion and Influence
In reality, President Trump will have quite a great deal of discretion on how he acts, especially with a Republican Congress. However, this is not just a "magic wish list of everything that Trump wants." The incoming administration will have to navigate a complex economic landscape.
Tackling Inflation
Part 2/5:
Many Americans voted with their wallets in this election, as consumer prices have increased over 20% since February 2020. This is an issue that the Federal Reserve typically manages, but President Trump may seek more control there. He has expressed a belief that he has a "better instinct" than the Federal Reserve. However, politicizing the central bank is generally associated with higher rates of inflation, which could ultimately hurt the US and benefit the rest of the world.
Tax Policy
Part 3/5:
Trump has proposed ideas like leaving about 93 million Americans off the hook for at least a portion of their federal income taxes. While this may seem bold, such proposals often transform by the time they are implemented. The tax cuts passed during Trump's first term are set to expire in 2025, and Republicans generally want to see those extended. To pay for such cuts, Congress may consider ending the tax-exempt status for municipal bonds or dialing back healthcare spending, which could add to the national debt.
Deregulation and Tariffs
Part 4/5:
Another option to boost economic growth is to loosen regulations that impact industries like oil production, airlines, banking, and tech. The deregulatory process is seen as a potential area of influence for the Trump administration. However, the extent to which Trump alone can shape the economy is often overstated, as it is subject to many foreign influences.
Trump has also called for tariffs of 10 to 20% on imports, with higher tariffs on Chinese goods. The goal is to generate revenue and bring industrial jobs back to the US. However, this could lead to higher prices for consumers, particularly impacting lower-income households, and make it harder to produce industrial products in the US.
Immigration and the Economy
Part 5/5:
The President-elect's promise to deport undocumented people could also have a far-reaching economic impact. If a substantial number of the estimated 8.3 million undocumented workers in the US were expelled, it would have large negative effects on the economy, particularly in sectors like agriculture and construction. Food prices would rise, and the housing market would be substantially disrupted, as these workers provide a reservoir of relatively low-cost labor that is essential to the functioning of the economy.
In conclusion, the economic outlook under President Trump is complex and multifaceted. While he has proposed bold ideas, the actual implementation and impact remain to be seen as he navigates the realities of governing the world's leading economy.